You have just purchased of preferred shares for $50.00.The preferred shares pay an annual dividend of $5.50 per share forever.What is the rate of return on your investment?

Question

Quizplus · Accepted Answer

The rate of return on the investment can be calculated by dividing the annual dividend by the purchase price of the shares and multiplying by 100 to get a percentage. 
($5.50/$50.00) x 100 = 11.0% 
Therefore, the rate of return on the investment is 11.0%.

You Have Just Purchased of Preferred Shares for $50